Enders, who is German, singled out Angela Merkel’s
government as the stumbling block that contributed most to the
merger’s downfall, saying in a letter to employees that “I’m
ready to admit that we never expected to face such opposition
against the deal, in particular not in Berlin.”

Merkel expressed her opposition to a deal in a phone call
with French President Francois Hollande, according to a person
with knowledge of the talks, who asked not to be identified
because the conversation was private. German lawmakers had shown
growing reservations about the combination since it became
public, criticizing Enders for a lack of detail on his plans and
that EADS should own a larger chunk of the combined company.

By contrast, Enders applauded the “strong efforts” by the
French and U.K. governments to overcome an impasse, which
ultimately proved futile as the deal collapsed yesterday with
just hours left to produce a merger document or seek more time
for an accord. Enders, calling the failed deal “unfortunate”
and an “opportunity lost,” said he’d learnt a “number of
lessons.”

“We will need to review our group strategy and defense
activities in particular,” Enders wrote in the letter, which
was obtained by Bloomberg News yesterday. “However, one thing
is already clear: there will be no turning back to where we
started from, and that pertains not only to strategy.”

Not Enough

The company declined as much as 48 cents, or 1.8 euros, ro
27 euros in Paris today, and traded at 27.05 euros as of 12:33
p.m. The stock had fallen 12 percent in the month between the
first announcement of the merger plan and the day before it fell
apart, as investors questioned the rationale of the deal.

EADS, based in Toulouse in southern France, and London-based BAE ended their effort to combine after first announcing
the plan on Sept. 12. The disclosure of the project followed
months of closed-door negotiations with governments that sought
to win over the political stakeholders.

EADS’s supervisory board members continues to appreciate
Enders in his leadership role and “renewed their full support”
at a regular meeting today, EADS said in a statement today.
Chairman Arnaud Lagardere, whose namesake publishing company is
a major shareholder in EADS, had demanded the merger modalities
be reviewed while discussions were still ongoing.

Unwilling

While France and the U.K. were willing to give Germany a
stake of about 9 percent in the enlarged group and thereby equal
to France’s future holding, Merkel’s government still failed to
warm to the deal on concern the combination would marginalize
Europe’s largest economy and focus decision-making in France and
the U.K. Germany.

German Deputy Economy Minister Peter Hintze, who is in
charge of coordinating the government’s aerospace and defense
policy, said the failure of the talks between EADS and BAE was
in Germany’s interest, Spiegel magazine reported. Hintze and
Enders had clashed before over issues such as company
headquarters, which Enders pooled in France this year.

“I think that Germany’s industrial interests are best
protected in this form of having a strong production chain from
research, development to industrial production,” Hintze was
quoted by Spiegel as saying. A ministry spokesman declined to
comment on the report.

Enders indicated that the negotiations with BAE over the
past few months will lead to deeper business ties between the
two companies, regardless of the failed merger.

“Our relationship has been strengthened through this
endeavor,” he said. “This is an excellent basis for the
further development of our business ties in the defense field.”